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OPERATIONS RESEARCH
Page ii
INTRODUCTION TO Page iii
OPERATIONS RESEARCH
Eleventh Edition
FREDERICK S. HILLIER
Stanford University
GERALD J. LIEBERMAN
Late of Stanford University
Page iv
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ABOUT THE AUTHORS Page v
WRITERS
PREFACE XX
CHAPTER 1
Introduction 1
1.1 The Origins of Operations Research 1
1.2 The Nature of Operations Research 3
1.3 The Relationship between Analytics and Operations Research 4
1.4 The Impact of Operations Research 8
1.5 Some Trends that Should Further Increase the Future Impact of Operations R
esearch 11
1.6 Algorithms and or Courseware 12
Selected References 14
Problems 14
CHAPTER 2
Overview of How Operations Research and Analytics Professionals Analyze Probl
ems 15
2.1 Defining the Problem 16
2.2 Gathering and Organizing Relevant Data 17
2.3 Using Descriptive Analytics to Analyze Big Data 18
2.4 Using Predictive Analytics to Analyze Big Data 19
2.5 Formulating a Mathematical Model to Begin Applying Prescriptive Analytics
23
2.6 Learning How to Derive Solutions from the Model 25
2.7 Testing the Model 28
2.8 Preparing to Apply the Model 29
2.9 Implementation 29
2.10 Conclusions 30
Selected References 30
Problems 31
CHAPTER 3
Introduction to Linear Programming 32
3.1 Prototype Example 33
3.2 The Linear Programming Model 40
3.3 Assumptions of Linear Programming 45
3.4 Additional Examples 52
3.5 Formulating and Solving Linear Programming Models on a Spreadsheet 61
3.6 Formulating Very Large Linear Programming Models 69
3.7 Conclusions 77
Selected References 77
Learning Aids for this Chapter on Our Website 77
Problems 78 Page x
Case 3.1 Reclaiming Solid Wastes 89
Previews of Added Cases on Our Website 89
Case 3.2Cutting Cafeteria Costs 89
Case 3.3Staffing a Call Center 89
Case 3.4Promoting a Breakfast Cereal 90
Case 3.5Auto Assembly 90
CHAPTER 4
Solving Linear Programming Problems: The Simplex Method 91
4.1 The Essence of the Simplex Method 92
4.2 Setting Up the Simplex Method 96
4.3 The Algebra of the Simplex Method 100
4.4 The Simplex Method in Tabular Form 106
4.5 Tie Breaking in the Simplex Method 111
4.6 Reformulating Nonstandard Models to Prepare for Applying the Simplex Met
hod 114
4.7 The Big M Method for Helping to Solve Reformulated Models 122
4.8 The Two-Phase Method is an Alternative to the Big M Method 129
4.9 Postoptimality Analysis 135
4.10 Computer Implementation 143
4.11 The Interior-Point Approach to Solving Linear Programming Problems 146
4.12 Conclusions 149
Appendix 4.1: An Introduction to Using LINDO and LINGO 149
Selected References 153
Learning Aids for this Chapter on Our Website 153
Problems 154
Case 4.1 Fabrics and Fall Fashions 163
Previews of Added Cases on Our Website 165
Case 4.2New Frontiers 165
Case 4.3Assigning Students to Schools 165
CHAPTER 5
The Theory of the Simplex Method 166
5.1 Foundations of the Simplex Method 166
5.2 The Simplex Method in Matrix Form 177
5.3 A Fundamental Insight 186
5.4 The Revised Simplex Method 189
5.5 Conclusions 192
Selected References 192
Learning Aids for this Chapter on Our Website 193
Problems 193
CHAPTER 6
Duality Theory 200
6.1 The Essence of Duality Theory 200
6.2 Primal-Dual Relationships 208
6.3 Adapting to Other Primal Forms 213
6.4 The Role of Duality Theory in Sensitivity Analysis 217
6.5 Conclusions 220
Selected References 220 Page xi
Learning Aids for this Chapter on Our Website 220
Problems 221
CHAPTER 7
Linear Programming under Uncertainty 225
7.1 The Essence of Sensitivity Analysis 226
7.2 Applying Sensitivity Analysis 233
7.3 Performing Sensitivity Analysis on a Spreadsheet 250
7.4 Robust Optimization 259
7.5 Chance Constraints 263
7.6 Stochastic Programming with Recourse 266
7.7 Conclusions 271
Selected References 271
Learning Aids for this Chapter on Our Website 272
Problems 273
Case 7.1 Controlling Air Pollution 281
Previews of Added Cases on Our Website 282
Case 7.2Farm Management 282
Case 7.3Assigning Students to Schools, Revisited 282
Case 7.4Writing a Nontechnical Memo 282
CHAPTER 8
Other Algorithms for Linear Programming 283
8.1 The Dual Simplex Method 283
8.2 Parametric Linear Programming 287
8.3 The Upper Bound Technique 293
8.4 An Interior-Point Algorithm 295
8.5 Conclusions 306
Selected References 307
Learning Aids for this Chapter on Our Website 307
Problems 307
CHAPTER 9
The Transportation and Assignment Problems 312
9.1 The Transportation Problem 313
9.2 A Streamlined Simplex Method for the Transportation Problem 326
9.3 The Assignment Problem 338
9.4 A Special Algorithm for the Assignment Problem 346
9.5 Conclusions 351
Selected References 351
Learning Aids for this Chapter on Our Website 352
Problems 352
Case 9.1 Shipping Wood to Market 358
Previews of Added Cases on Our Website 359
Case 9.2Continuation of the Texago Case Study 359
Case 9.3Project Pickings 359
Page xii
CHAPTER 10
Network Optimization Models 360
10.1 Prototype Example 361
10.2 The Terminology of Networks 362
10.3 The Shortest-Path Problem 365
10.4 The Minimum Spanning Tree Problem 370
10.5 The Maximum Flow Problem 375
10.6 The Minimum Cost Flow Problem 383
10.7 The Network Simplex Method 391
10.8 A Network Model for Optimizing a Project’s Time-Cost Trade-Off 401
10.9 Conclusions 413
Selected References 413
Learning Aids for this Chapter on Our Website 413
Problems 414
Case 10.1 Money in Motion 422
Previews of Added Cases on Our Website 424
Case 10.2Aiding Allies 424
Case 10.3Steps to Success 424
CHAPTER 11
Dynamic Programming 425
11.1 A Prototype Example for Dynamic Programming 425
11.2 Characteristics of Dynamic Programming Problems 430
11.3 Deterministic Dynamic Programming 432
11.4 Probabilistic Dynamic Programming 448
11.5 Conclusions 454
Selected References 454
Learning Aids for this Chapter on Our Website 454
Problems 455
CHAPTER 12
Integer Programming 460
12.1 Prototype Example 461
12.2 Some BIP Applications 464
12.3 Using Binary Variables to Deal with Fixed Charges 470
12.4 A Binary Representation of General Integer Variables 472
12.5 Some Perspectives on Solving Integer Programming Problems 473
12.6 The Branch-and-Bound Technique and its Application to Binary Integer Progr
amming 477
12.7 A Branch-and-Bound Algorithm for Mixed Integer Programming 489
12.8 The Branch-and-Cut Approach to Solving BIP Problems 495
12.9 The Incorporation of Constraint Programming 502
12.10Conclusions 506
Selected References 507
Learning Aids for this Chapter on Our Website 508
Problems 508
Case 12.1 Capacity Concerns 516
Previews of Added Cases on Our Website 518 Page xiii
Case 12.2Assigning Art 518
Case 12.3Stocking Sets 518
Case 12.4Assigning Students to Schools, Revisited Again 519
CHAPTER 13
Nonlinear Programming 520
13.1 Sample Applications 521
13.2 Graphical Illustration of Nonlinear Programming Problems 525
13.3 Types of Nonlinear Programming Problems 529
13.4 One-Variable Unconstrained Optimization 535
13.5 Multivariable Unconstrained Optimization 540
13.6 The Karush-Kuhn-Tucker (KKT) Conditions for Constrained Optimization 546
13.7 Quadratic Programming 550
13.8 Separable Programming 556
13.9 Convex Programming 563
13.10Nonconvex Programming (with Spreadsheets) 571
13.11Conclusions 575
Selected References 576
Learning Aids for this Chapter on Our Website 576
Problems 577
Case 13.1 Savvy Stock Selection 588
Previews of Added Cases on Our Website 589
Case 13.2International Investments 589
Case 13.3Promoting a Breakfast Cereal, Revisited 589
CHAPTER 14
Metaheuristics 590
14.1 The Nature of Metaheuristics 591
14.2 Tabu Search 598
14.3 Simulated Annealing 608
14.4 Genetic Algorithms 618
14.5 Conclusions 628
Selected References 629
Learning Aids for this Chapter on Our Website 630
Problems 630
CHAPTER 15
Game Theory 634
15.1 The Formulation of Two-Person, Zero-Sum Games 634
15.2 Solving Simple Games—A Prototype Example 636
15.3 Games with Mixed Strategies 641
15.4 Graphical Solution Procedure 643
15.5 Solving by Linear Programming 645
15.6 Extensions 649
15.7 Conclusions 650
Selected References 650
Learning Aids for this Chapter on Our Website 650
Problems 651 Page xiv
CHAPTER 16
Decision Analysis 655
16.1 A Prototype Example 656
16.2 Decision Making without Experimentation 657
16.3 Decision Making with Experimentation 662
16.4 Decision Trees 668
16.5 Utility Theory 673
16.6 The Practical Application of Decision Analysis 680
16.7 Multiple Criteria Decision Analysis, Including Goal Programming 682
16.8 Conclusions 686
Selected References 687
Learning Aids for this Chapter on Our Website 688
Problems 688
Case 16.1 Brainy Business 698
Preview of Added Cases on Our Website 700
Case 16.2Smart Steering Support 700
Case 16.3Who Wants to Be a Millionaire? 700
Case 16.4University Toys and the Engineering Professor Action Figures 700
CHAPTER 17
Queueing Theory 701
17.1 Prototype Example 702
17.2 Basic Structure of Queueing Models 702
17.3 Some Common Types of Real Queueing Systems 707
17.4 The Role of the Exponential Distribution 708
17.5 The Birth-and-Death Process 714
17.6 Queueing Models Based on the Birth-and-Death Process 719
17.7 Queueing Models Involving Nonexponential Distributions 731
17.8 Priority-Discipline Queueing Models 739
17.9 Queueing Networks 744
17.10The Application of Queueing Theory 748
17.11Behavioral Queueing Theory 753
17.12Conclusions 754
Selected References 755
Learning Aids for this Chapter on Our Website 756
Problems 757
Case 17.1 Reducing In-Process Inventory 769
Preview of an Added Case on Our Website 770
Case 17.2Queueing Quandary 770
CHAPTER 18
Inventory Theory 771
18.1 Examples 772
18.2 Components of Inventory Models 774
18.3 Deterministic Continuous-Review Models 776
18.4 A Deterministic Periodic-Review Model 786
18.5 Deterministic Multiechelon Inventory Models for Supply Chain Management
791
18.6 A Stochastic Continuous-Review Model 810
18.7 A Stochastic Single-Period Model for Perishable Products 814 Page xv
18.8 Revenue Management 826
18.9 Conclusions 834
Selected References 834
Learning Aids for this Chapter on Our Website 835
Problems 836
Case 18.1 Brushing Up on Inventory Control 846
Previews of Added Cases on Our Website 848
Case 18.2TNT: Tackling Newsboy’s Teaching 848
Case 18.3Jettisoning Surplus Stock 848
CHAPTER 19
Markov Decision Processes 849
19.1 A Prototype Example 850
19.2 A Model for Markov Decision Processes 852
19.3 Linear Programming and Optimal Policies 855
19.4 Markov Decision Processes in Practice 859
19.5 Conclusions 861
Selected References 862
Learning Aids for this Chapter on Our Website 862
Problems 863
CHAPTER 20
Simulation 866
20.1 The Essence of Simulation 866
20.2 Some Common Types of Applications of Simulation 878
20.3 Generation of Random Numbers 882
20.4 Generation of Random Observations from a Probability Distribution 886
20.5 Simulation Optimization 891
20.6 Outline of a Major Simulation Study 900
20.7 Conclusions 904
Selected References 905
Learning Aids for this Chapter on Our Website 906
Problems 907
Case 20.1 Reducing In-Process Inventory, Revisted 912
Previews of Added Cases on Our Website 912
Case 20.2Planning Planers 912
Case 20.3Pricing under Pressure 912
APPENDIXES
1. Documentation for the OR Courseware 913
2. Convexity 915
3. Classical Optimization Methods 920
4. Matrices and Matrix Operations 923
5. Table for a Normal Distribution 928
INDEXES
Author Index 942
Subject Index 949
SUPPLEMENTS AVAILABLE Page ix
ON THE TEXT WEBSITE
www.mhhe.com/hillier11e
ADDITIONAL CASES
Case 3.2 Cutting Cafeteria Costs
Case 3.3 Staffing a Call Center
Case 3.4 Promoting a Breakfast Cereal
Case 3.5 Auto Assembly
Case 4.2 New Frontiers
Case 4.3 Assigning Students to Schools
Case 7.2 Farm Management
Case 7.3 Assigning Students to Schools, Revisited
Case 7.4 Writing a Nontechnical Memo
Case 9.2 Continuation of the Texago Case Study
Case 9.3 Project Pickings
Case 10.2 Aiding Allies
Case 10.3 Steps to Success
Case 12.2 Assigning Art
Case 12.3 Stocking Sets
Case 12.4 Assigning Students to Schools, Revisited Again
Case 13.2 International Investments
Case 13.3 Promoting a Breakfast Cereal, Revisited
Case 16.2 Smart Steering Support
Case 16.3 Who Wants to be a Millionaire?
Case 16.4 University Toys and the Engineering Professor Action Figures
Case 17.2 Queueing Quandary
Case 18.2 TNT: Tackling Newsboy’s Teaching
Case 18.3 Jettisoning Surplus Stock
Case 20.2 Planning Planers
Case 20.3Pricing under Pressure
SUPPLEMENT 1 TO CHAPTER 3
The LINGO Modeling Language
SUPPLEMENT 2 TO CHAPTER 3
More about LINGO
SUPPLEMENT TO CHAPTER 6
An Economic Interpretation of the Dual Problem and the Simplex Method
Problem
SUPPLEMENT 1 TO CHAPTER 9
A Case Study with Many Transportation Problems
SUPPLEMENT 2 TO CHAPTER 9
The Construction of Initial BF Solutions for Transportation Problems
Problems
SUPPLEMENT TO CHAPTER 12
Some Innovative Uses of Binary Variables in Model Formulation
Problems
SUPPLEMENT TO CHAPTER 16
Preemptive Goal Programming and Its Solution Procedures
Problems
Case 16S-1 A Cure for Cuba
Case 16S-2 Airport Security
SUPPLEMENT TO CHAPTER 18
Stochastic Periodic-Review Models
Problems
SUPPLEMENT 1 TO CHAPTER 19
A Policy Improvement Algorithm for Finding Optimal Policies
Problems
SUPPLEMENT 2 TO CHAPTER 19
A Discounted Cost Criterion
Problems
SUPPLEMENT 1 TO CHAPTER 20
Variance-Reducing Techniques
Problems
SUPPLEMENT 2 TO CHAPTER 20
Regenerative Method of Statistical Analysis
Problems
CHAPTER 21
The Art of Modeling with Spreadsheets
21.1 A Case Study: The Everglade Golden Years Company Cash Flow Problem
21.2 Overview of the Process of Modeling with Spreadsheets
21.3 Some Guidelines for Building “Good” Spreadsheet Models
21.4 Debugging a Spreadsheet Model
21.5 Conclusions
Selected References
Learning Aids for this Chapter on Our Website
Problems
Case 21.1 Prudent Provisions for Pensions
CHAPTER 22
Project Management with PERT/CPM
22.1 A Prototype Example—The Reliable Construction Co. Project
22.2 Using a Network to Visually Display a Project
22.3 Scheduling a Project with PERT/CPM
22.4 Dealing with Uncertain Activity Durations
22.5 Considering Time-Cost Trade-Offs
22.6 Scheduling and Controlling Project Costs
22.7 An Evaluation of PERT/CPM
22.8 Conclusions
Selected References
Learning Aids for this Chapter on Our Website
Problems
Case 22.1 “School’s out forever . . .”
CHAPTER 23
Additional Special Types of Linear Programming Problems
23.1 The Transshipment Problem
23.2 Multidivisional Problems
23.3 The Decomposition Principle for Multidivisional Problems
23.4 Multitime Period Problems
23.5 Multidivisional Multitime Period Problems
23.6 Conclusions
Selected References
Problems
CHAPTER 24
Probability Theory
24.1 Sample Space
24.2 Random Variables
24.3 Probability and Probability Distributions
24.4 Conditional Probability and Independent Events
24.5 Discrete Probability Distributions
24.6 Continuous Probability Distributions
24.7 Expectation
24.8 Moments
24.9 Bivariate Probability Distribution
24.10 Marginal and Conditional Probability Distributions
24.11 Expectations for Bivariate Distributions
24.12 Independent Random Variables and Random Samples
24.13 Law of Large Numbers
24.14 Central Limit Theorem
24.15 Functions of Random Variables
Selected References
Problems
CHAPTER 25
Reliability
25.1 Structure Function of a System
25.2 System Reliability
25.3 Calculation of Exact System Reliability
25.4 Bounds on System Reliability
25.5 Bounds on Reliability Based upon Failure Times
25.6 Conclusions
Selected References
Problems
CHAPTER 26
The Application of Queueing Theory
26.1 Examples
26.2 Decision Making
26.3 Formulation of Waiting-Cost Functions
26.4 Decision Models
26.5 The Evaluation of Travel Time
26.6 Conclusions
Selected References
Learning Aids for this Chapter on Our Website
Problems
CHAPTER 27
Forecasting
27.1 Some Applications of Forecasting
27.2 Judgmental Forecasting Methods
27.3 Time Series
27.4 Forecasting Methods for a Constant-Level Model
27.5 Incorporating Seasonal Effects into Forecasting Methods
27.6 An Exponential Smoothing Method for a Linear Trend Model
27.7 Forecasting Errors
27.8 The ARIMA Method
27.9 Causal Forecasting with Linear Regression
27.10 Conclusions
Selected References
Learning Aids for this Chapter on Our Website
Problems
Case 27.1 Finagling the Forecasts
CHAPTER 28
Markov Chains
28.1 Stochastic Processes
28.2 Markov Chains
28.3 Chapman-Kolmogorov Equations
28.4 Classification of States of a Markov Chain
28.5 Long-Run Properties of Markov Chains
28.6 First Passage Times
28.7 Absorbing States
28.8 Continuous Time Markov Chains
Selected References
Learning Aids for this Chapter on Our Website
Problems
APPENDIX 6
Simultaneous Linear Equations
PREFACE Page xx
Two features account for this success. First, the editions have been
outstanding from students’ points of view due to excellent motivation, clear
and intuitive explanations, good examples of professional practice, excellent
organization of material, very useful supporting software, and appropriate but
not excessive mathematics. Second, the editions have been attractive from
instructors’ points of view because they repeatedly infuse state-of-the-art
material with remarkable lucidity and plain language. For example, a
wonderful chapter on metaheuristics was created for the eighth edition.
When we began work on the first edition, Jerry already was a
prominent member of the field, a successful textbook writer, and
the chairman of a renowned operations research program at
Stanford University. I was a very young assistant professor just
starting my career. It was a wonderful opportunity for me to work
with and to learn from the master. I will be forever indebted to Jerry
for giving me this opportunity.
Now, sadly, Jerry is no longer with us. During the progressive
illness that led to his death in 1999, I resolved that I would pick up
the torch and devote myself to subsequent editions of this book,
maintaining a standard that would fully honor Jerry. Therefore, I
took early retirement from my faculty responsibilities at Stanford in
order to work full time on textbook writing for the foreseeable
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“mere incidents.” From the review given below, in Chapter XIII, it is
clear that the main determinants of American culture accumulation,
after the first primitive start, were internal; and the case seems as
clear for metal working as for any phase.
109. Zero
One of the milestones of civilization is the number symbol zero.
This renders possible the unambiguous designation of numbers of
any size with a small stock of figures. It is the zero that enables the
symbol 1 to have the varying values of one, ten, hundred, or
thousand. In our arithmetical notation, the symbol itself and its
position both count: 1,234 and 4,321 have different values although
they contain the identical symbols. Such a system is impossible
without a sign for nothingness: 123 and 1,023 would be
indistinguishable. Our zero, along with the other nine digits, appears
to be an invention of the Hindus approximately twelve or fifteen
hundred years ago. We call the notation “Arabic” because it was
transmitted from India to Europe by the Arabs.
Fig. 28. Maya symbols for zero: a, monumental; b, c, cursive. (From Bowditch.)
Without a zero sign and position values, two methods are open for
the representation of higher numerical values. More and more signs
can be added for the high values. This was done by the Greeks and
Romans. MV means 1,005, and only that. This is simple enough; but
1,888 requires so cumbersome a denotation as MDCCCLXXXVIII—
thirteen figures of six different kinds. A simple system of multiplying
numbers expressed like this one is impossible. The unwieldiness is
due to the fact that the Romans, not having hit upon the device of
representing nothingness, employed the separate signs I, X, C, M for
the quantities which we represent by the single symbol 1 with from
no to three zeroes added.
The other method is that followed by the Chinese. Besides signs
corresponding to our digits from 1 to 9, they developed symbols
corresponding to “ten times,” “hundred times,” and so on. This was
much as if we should use the asterisk, *, to denote tens, the dagger,
† , for hundreds, the paragraph, ¶, for thousands. We could then
represent 1,888 by 1 ¶ 8 † 8 * 8, and 1,005 by 1 ¶ 5, without any risk
of being misunderstood. But the writing of the numbers would in
most cases require more figures, and mathematical operations
would be more awkward.
The only nation besides the Hindus to invent a zero sign and the
representation of number values by position of the basic symbols,
were the Mayas of Yucatan. Some forms of their zero are shown in
Figure 28. This Maya development constitutes an indubitable parallel
with the Hindu one. So far as the involved logical principle is
concerned, the two inventions are identical. But again the concrete
expressions of the principle are dissimilar. The Maya zero does not
in the least have the form of our or the Hindus’ zero. Also, the Maya
notation was vigesimal where ours is decimal. They worked with
twenty fundamental digits instead of ten. Their “100” therefore stood
for 400, their “1,000” for 8,000.[17] Accordingly, when they wrote, in
their corresponding digits, 1,234, the value was not 1,234 but 8,864.
Obviously there can be no question of a common origin for such a
system and ours. They share an idea or a method, nothing more. As
a matter of fact, these two notational systems, like all others, were
preceded by numeral word counts. Our decimal word count is based
on operations with the fingers, that of the Maya on operations with
the fingers and toes. Twenty became their first higher unit because
twenty finished a person.
It is interesting that of the two inventions of zero, the Maya one
was the earlier. The arithmetical and calendrical system of which it
formed part was developed and in use by the time of the birth of
Christ. It may be older; it certainly required time to develop. The
Hindus may have possessed the prototypes of our numerals as early
as the second century after Christ, but as yet without the zero, which
was added during the sixth or according to some authorities not until
the ninth century. This priority of the Maya must weaken the
arguments sometimes advanced that the ancient Americans derived
their religion, zodiac, art, or writing from Asia. If the zero was their
own product, why not the remainder of their progress also? The only
recourse left the naïve migrationist would be to turn the tables and
explain Egyptian and Babylonian civilization as due to a Maya
invasion from Yucatan.
Fig. 29. Distribution of types of exogamic institutions in Australia: 2M, two classes,
matrilinear; 4M, four classes, matrilinear; 4P, four classes, patrilinear; 8P,
eight classes, patrilinear; black areas, no classes, patrilinear exogamic
totems; X, totems independent of classes; Y, totems replace sub-classes; Z,
no organization; ?, uninhabited or unknown. (After Thomas and Graebner.)